It's a long way to Kyrgyzstan, especially if you're going via New Zealand. But in the global financial system, anywhere to anywhere is just a click away.

Earlier this year, an investigation by international NGO Global Witness uncovered suspicious transactions worth billions of dollars flowing through Kyrgyzstan's largest bank. Most of these transactions involve shell companies in Britain, Belize and New Zealand that have little or no real business activities.

In one case, money from a Kyrgyz bank account held by a New Zealand company was used to pay a German vendor on behalf of a Russian company. Why? Through the use of shell companies and a web of transactions around the world, it's almost impossible to track down the real people and the real purpose behind these transactions. They could be avoiding taxes, laundering the proceeds of corruption or organized crime, or funding terrorism.

The interconnection of the global financial system means that even countries like New Zealand, ranked by Transparency International as the least corrupt country in the world, are affected. As part of the UN convention for the Suppression of the Financing of Terrorism, countries around the world have put legislation in place to stop the financial system from being misused by criminals and terrorists.

In New Zealand, the Anti-Money Laundering and Countering Financing of Terrorism Act is due to come into force in June 2013. The law will put the responsibility on banks and other financial institutions to put stricter systems in place to verify the identity of customers and to spot suspicious activity.

According to the Government, the regime will cost nearly US$79m to set up, and another US$17m every year in ongoing costs to the industry. But more importantly, these changes will affect how banks interact with their customers. So how can they implement a more secure system, which deters and hinders the bad guys, but provides a smooth and painless experience for their customers?

UX in banking

At Optimal Usability – a New Zealand firm specializing in user experience (UX) design and usability – we’ve been working with several clients in the financial sector to help solve this problem. Here we take a look at one client who’s providing personal, business and institutional services to more than 11 million customers around the world, including many in New Zealand.

The first challenge is that the new legislation will require stricter and more intrusive forms of customer identification and verification. More information and documentation will have to be provided by new and existing customers; staff will have to ask more questions and record customer information with greater detail. These additional requirements could be a source of inconvenience and embarrassment for customers and staff alike, and they have the potential to damage the valuable relationship the bank has with their customers.

Under the new laws, banks must also perform risk assessments on customers. Based on certain factors like age, occupation, country of residency, length of relationship with the bank, and source of funds, a risk profile would be generated. Non-routine transactions would also be flagged, and more documentation would be required for verification. These risk profiles have to be shared within the business, across a mix of new and legacy systems. However, they cannot be highlighted to customers, who often engage with staff members through screen sharing.

Our UX workflow was conducted in four stages:

1.User requirements research

The bank’s business analysts reviewed the legislation and outlined the business requirements. This in turn informed the user requirements research. For the personal banking customers the bank’s UX team, with assistance from Optimal Usability, undertook contextual enquiries and workplace observations. The subject matter experts’ research was undertaken using scenarios and storyboarding.

2.Low-fidelity wireframes

The contextual interviews we conducted showed that many customers would not necessarily have the required documentation at hand. Workarounds would be required so that transactions could still be made and full verification (such as identity checks from driver’s licenses and passports) could be presented the next day. The UX team ran walkthroughs of a series of low-fidelity wireframes with project stakeholders such as subject matter experts.

3.Medium-fidelity wireframes

The UX team are currently preparing a series of medium-fidelity wireframes for BA walkthroughs. Card sorts and tree tests using the online OptimalSort and Treejack tools developed by our sister company Optimal Workshop, will be undertaken before further UX research and usability testing with the personal banking customers.

The bank’s development team and solution architects also undertook UX walkthroughs of these medium-fidelity wireframes before finalizing the technical requirements.

4.Final (signed off) wireframes

The final wireframes will shortly be UX reviewed and impact analyzed by the major business stakeholders.

We’ll be continuing to work with our client to improve the user experience in the lead-up to the new regime coming into force.

A great opportunity for UX as an industry

Banks around the world have faced similar challenges as they’ve moved to fulfil their UN obligations. Placing UX at the heart of driving the changes has proved a successful strategy for many, and highlighted the great opportunities for UX leadership. Instead of seeing security and usability as competing demands, usability can actually enable better security in our systems and make the world a little safer too.

About Optimal Usability Optimal Usability is New Zealand’s leading usability consultancy with a team of usability experts, information architects, business analysts and designers. We share a passion for making the world a better place by designing things that are simple and satisfying to use.

For the World Usability Day 2012 theme - The Usability of Financial Systems, Optimal Workshop will launch the Design a Better World - The Optimal Designer's Toolkitfor UX designers and information architects on 8 November 2012.